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Been thinking about the "housing market is going strong"* headlines in light of my dissertation research...so, here's short-ish thread about property sales in Illinois before + after the last crisis....
*these positive headlines are discounting the looming rental eviction crisis
*these positive headlines are discounting the looming rental eviction crisis
For a refresher, the Great Recession lasted from December 2007–June 2009 (per National Bureau of Economic Research)
This chart shows the number of residential parcels transferred in Illinois each year from 2000 through 2016
This chart shows the number of residential parcels transferred in Illinois each year from 2000 through 2016
As the chart shows, property sales started dipping before the formal recession and didn't start increasing again until 2012
total transfers in 2016 were nearly 30% less than 2005, the peak of sales activity
total transfers in 2016 were nearly 30% less than 2005, the peak of sales activity
This chart is looking at the number of parcels transferred each year in IL between 2000-2016 that were likely related to foreclosure....this includes short sales, auctions + court orders
Notice the peak is 2013, nearly 4 years AFTER the recession formally ended
Notice the peak is 2013, nearly 4 years AFTER the recession formally ended
I'm certainly not the first to observe that the wave of foreclosures lagged the formal recession.... @HousingStudies has good data on this for Chciagoland, and check out @DanImmergluck's book Preventing the Next Mortgage Crisis
last, another important trend was investors snatching up foreclosures... @FieldsDesiree has done fantastic work on this topic. And Manuel Aalber's book The Financialization of Housing is worth a read
In IL investor activity peaked in 2013. This chart shows total residential parcels transferred in Illinois (the black bar) with the portion of that activity likely due to investor activity (red line). So in 2013, investor purchases were nearly 1/4 of all residential transfers
Several, now very large single-family rental companies were started in the 2010s specially to capitalize on the glut of foreclosures.
Two such companies, American Homes 4 Rent + Invitation Homes, bought nearly 3,000 properties in IL in 2013 (1.3% of all residential sales).
Two such companies, American Homes 4 Rent + Invitation Homes, bought nearly 3,000 properties in IL in 2013 (1.3% of all residential sales).
To sum, in the wake of the last recession, thousands of people lost their homes, newly formed companies snapped them up (for cheap), and rent them out
oh these new landlords may have higher eviction rates than other landlords (check out @EloraRaymond's work)
oh these new landlords may have higher eviction rates than other landlords (check out @EloraRaymond's work)
i don't know what is going to happen with owner-occupied or rental housing, but i do not feel very optimistic....even if the stock market is hitting record highs https://www.nytimes.com/2020/08/18/business/stock-market-record.html
last part of thread...also go check out @BenFTeresa's work. he is very sharp on this topic too https://twitter.com/BenFTeresa/status/1295864333675761666?s=20
ok really, fin
the tl:dr: my big takeaway from looking property sales before and after Great Recession is that much of the crisis lagged the formal recession
the tl:dr: my big takeaway from looking property sales before and after Great Recession is that much of the crisis lagged the formal recession
